“Our review substantiated that VA inappropriately provided 35,000 emergency payments totaling approximately $103 million to ineligible military service members and veterans who did not participate in VA’s education programs. VA also provided 2,700 emergency payments worth $8 million to service members who enrolled in VA education programs, but who did not meet VA criteria for emergency payments.”

We reviewed a hotline allegation that inadequate controls during this emergency payment initiative resulted in payments to ineligible recipients. Our review substantiated that VA inappropriately provided 35,000 emergency payments totaling approximately $103 million to ineligible military service members and veterans who did not participate in VA’s education programs. VA also provided 2,700 emergency payments worth $8 million to service members who enrolled in VA education programs, but who did not meet VA criteria for emergency payments. VA rushed to plan and implement the emergency payment initiative in late September 2009 to prevent further hardship to students affected by significant delays in processing claims during implementation of the Post-9/11 GI Bill. Widespread payments to ineligible recipients occurred in part because VA did not have a contingency plan for emergency payments, did not clearly communicate eligibility rules to service members, and did not have adequate controls to determine whether applicants were eligible for VA emergency payments or enrolled in school during the fall 2009 term. These program weaknesses created vulnerabilities that were exploited by applicants who were either misguided or engaged in potentially fraudulent activities. The emergency payment initiative also resulted in increased administrative burdens and an estimated loss of about $87 million in unrecoverable debts out of the $356 million in total emergency payments. We recommended that the Acting Under Secretary for Benefits develop a contingency plan for future advance payments that includes clear communication on service member eligibility and controls to check for eligibility. The Acting Under Secretary for Benefits concurred with our finding and recommendation and provided additional information concerning these issues. We will follow up on the implementation of the recommendation.